In recent years, financial institutions have become increasingly diversified. Banks, for example, now offer a wide variety of products and services not previously available. These new products and services fall into two broad categories--new technologies for interacting with the financial institution and new financial services or "products" offered by the financial institution.
From the customer's point of view, there are certain access points (or, from the bank's perspective, "distribution points") through which the customer may access the bank's services. Historically, the principal access point was a teller. But recently, there has been a proliferation of automated access points including the now ubiquitous automatic teller machines and customer activated terminals (ATMs and CATS) and, more recently, screen phones, personal computers configured for banking, personal digital assistants, voice response systems, smart cards, teller workstations and banking staff terminals. Technology in existence today allows bank customers to access their banks from any place at any time and offers tremendous efficiencies for the bank. However, to achieve these benefits, customers must be willing to use these automated alternatives to human tellers. One way of encouraging use of automated systems is to make the systems as user friendly as possible. To this end, automated systems should be able to process business language requests such as "How much money do I have in the bank?"
A business problem results from a business transaction request along the lines of "show me all the funds I have in the bank" or "move $100 from my checking account to my savings account" or some similar statement that shows up at the distribution or access point. From the bank's point of view, these business language requests must be processed by discrete "service providers" that handle check withdrawal authorization or mortgage loan processing or securities transactions, for example. These service providers are typically not capable of handling business language requests. The service providers tend to specialize. For example, a bank may have a mortgage processor, a securities processor and so on. Many banks outsource certain services, such as securities. As a result, none of these individual systems are aware of or care about the relationship, i.e., the fact that the customer has both the checking and the securities relationship with the bank. Another example is the transfer of money from checking to savings. If checking and savings are handled by discrete service providers, one service provider wants to know "debit $100" and another service provider wants to know "credit $100." The service providers don't really care about the relationship or what the source or destination of funds is, the providers only care about one direction of the transaction. In short, there is a gap between the access or distribution points and the service providers. There is need for a system and process that bridges this gap, i.e., something in the middle that has awareness of how to balance the whole thing together.
In addition, different service providers and access points can't speak with different protocols or languages. One understands screen formats and another one understands messages according to other protocols homegrown or otherwise. There is a need for a way of normalizing or flattening them all out to common language so they can interact with each other.
Financial institutions have also begun to offer a broader range of traditional banking accounts as well as investment and financial services. This ordinarily requires even more service providers.
There have been previous efforts to integrate financial services. For example, U.S. Pat. No. 5,424,938 ('938), to Wagner et al., discloses an interface system for a plurality of payment networks providing each user with a display of data necessary and applicable to complete a desired transaction. The interface system is accessed from a remote computer terminal and is disclosed for use in monetary transactions. In addition to providing a display, the system also allows the remote access user to perform transactions within the accessed account. The Wagner et al. preferred embodiment is summarized in 10 of FIG. 1 of patent '938, wherein payment networks including the Federal Reserve Bank 16 and FEDWIRE network for facilitating transfer of funds and securities between depository institutions 16 and the Society for Worldwide Interbank Financial Transfers (SIFT) network 20 are accessed by a bank housing a central computer 12. In addition, the central computer also provides access to the networks to customers having computers 28 with communications capabilities.
U.S. Pat. No. 5,126,936 ('936), to Champion et al., discloses a computer interface to a plurality of banking users. The interface comprises an information management system for a disclosed use in investment banking. The system, as summarized in FIG. 2 of the '936 patent, provides banks, brokers, and remote modem users with access accounts for deposits, investments and the like. Although disclosed primarily for investment purposes, the system is intended to be `goal oriented` according to particular markets to be invested in. Therefore the system provides some market demographic information (as may be related to the investment) to the user.
U.S. Pat. No. 5,455,407 ("407"), to Rosen, discloses an electronic banking system comprising electronic money and customer demographics to be exchanged electronically among banks and clearing houses. Customer accounts of any user bank can be accessed and manipulated according to information entered from a remote location. A summary of the preferred embodiment is provided in FIG. 1 of the '407 patent. The monetary system can be accessed remotely and in person.
U.S. Pat. No. 5,025,373, to Keyser, Jr. et al. discloses a remote banking terminal controlled by a host bank. Account information and financial services, although controlled by the host bank, are made available to the authorized customer. In addition, banks and related financial institutions other than the host bank can be provided with the remote banking terminal for access to account information.
U.S. Pat. No. 5,231,569, to Myatt et al., discloses remote banking access to customers. The bank accounts are accessed by `credit card` styled cards containing customer information on magnetic strips. The remote locations are then provided with customer demographic information including account funds and credit information. The remote locations are then provided with authorizations to credit moneys that are then debited to the customer account.
U.S. Pat. No. 5,177,342, to Adams, discloses a transaction approval system. The system verifies to remote users information as to customer demographics. This information may include financial and credit information. The customer demographics are available to the end user only in a read-only format and do not provide for direct customer account manipulation beyond authorization.
U.S. Pat. No. 5,496,991, to Delfer, III et al. discloses a database management system wherein pre-authorizations of monetary transfers are obtained from clients to initiate monetary transfers into other accounts. Verification of transfers are remitted to the sender. Although containing some customer demographics, the information shared with the user of the system is limited to the account and the potential for a monetary transfer. In addition, the manipulation of accounts is limited to credits and debits.
U.S. Pat. No. 5,283,829, to Anderson, discloses a system for banking via the telephone. The system includes verification of authorization of the client user and normal banking services. Although this system provides some customer demographics to authorize clients, the demographics are limited to authorized users to ensure that the customer controls access to the information.
The prior art references described above differ from the instant invention in, among other things, concentrating on the transfer of funds in payment networks rather than customer demographics as a product. As such the systems use different selection logic software/hardware than required by the instant invention.
In addition, the present invention is also directed to a data model that reflects the structure of a customer's relationship to the bank. The traditional marketing approach of banks has been to try to enroll customers in new accounts, typically checking or savings accounts. Then, when the bank offers additional financial products or services, the bank tries to cross sell new accounts to customers having existing accounts with the bank. Often, banks can offer special pricing based on a customer's "relationship" with the bank. In this context, "relationship" can refer to a customer's own accounts with the bank or the accounts maintained by family members or close relatives. For example, it may be advantageous to the bank to offer special pricing to the in-laws of very wealthy customers even if those in-laws might not qualify for special pricing on their own.
One barrier to traditional cross selling of new accounts and relationship pricing is the inability to identify certain relationships that might exist. In a large financial institution, for example, separate systems are typically maintained for the various products. Thus, it is readily apparent that a customer that has a low savings balance also has a large investment portfolio with the bank. In addition, the customer must repeatedly provide the bank with the same data. This is very inconvenient and inconvenience is a significant obstacle in marketing of financial services.
Financial service is very much an inertia business. Once a customer opens an account, he or she is unlikely to change that account because of the effort involved. Most people don't shop for financial services. Instead, something in a customer's life occurs to cause a customer to make a change or be open to a change. There are moments in life when inertia is overcome; either by moving, death, formation of a family, a customer gets so angry at something that the customer decides to make a change, or some other event occurs. Thus, at the moment a customer opens an account they are open to new components, but it is difficult to open a customer up again. For this reason, cross selling financial services is very difficult. Once a person has a set of accounts, then something's got to happen in their life to cause them to open up another account.
To overcome these obstacles, banks now try to build a relationship with the customer rather than opening stand alone accounts for the customer. Studies have shown that as a customer's relationship with a bank broadens, the customer's balances increase. As a consequence, there is a need to truly understand the relationship of a customer to the bank.
There have, of course, been attempts to provide linked account structures in the past. The Citicard account, introduced in 1976 and 1977, was the first account that allowed four or five accounts to be mechanically linked together. A simple transactional account, short term savings, day-to-day savings, and 90-day savings, checking and checking plus line of credit were all linked in the Citicard account. Over the next ten years, other banks copied this approach and began offering "linked accounts," which are essentially transactional banking accounts with some saving components and perhaps a line of credit--a very traditional banking product.
Another significant development was the asset management accounts offered by certain brokerage firms. These accounts offered a plurality of securities components in a single account. The brokerage firms were not, however able to offer traditional banking services. One example is Merrill Lynch's cash management account (CMA). Aspects of this account are described in U.S. Pat. Nos. 4,346,442 to Musmanno; U.S. Pat. No. 4,376,978 to Musmanno; U.S. Pat. No. 4,597,046 to Musmanno et al.; U.S. Pat. No. 4,674,044 to Musmanno et al.; U.S. Pat. No. 4,774,663 to Musmanno et al. and U.S. Pat. No. 5,270,922 to Higgins. The account offered by Merrill Lynch was limited to securities transactions and did not include full banking products.
Similarly, when a customer opens a brokerage account, there is no need to open a separate account for trading equities or for trading fixed income.
The next development in the evolution of Citibank's account was the so-called asset network account that included a full range of brokerage services and, in addition, full banking services. This form of account originally known as FOCUS has become known as the CITIGOLD Account. This account, like brokerage accounts, was intended for sophisticated investors. The central feature of the account was sweeping funds into a money market account on a daily basis. Such an account is not, however, suitable for a broad market account that includes unsophisticated investors. The CITIGOLD was an elite account intended for sophisticated investors.
The CITIGOLD Account system introduced the idea of integration and consistent presentations across the entire range of customer access points, including ATM machines, automated voice response systems, phone operators, staff screens, home banking on a computer, home banking on a screen phone, etc. In other words, in every contact with the financial institution, the customer sees the same presentation of the account and the same capability to do the transactions.
Another step in the evolution of the Citibank account was the CITIONE account, introduced in the early 1990's. This account permitted linking of transaction accounts, certain traditional banking accounts and bank saving accounts so the customer could access all these accounts. In some regions the CITIONE account included securities or loan services such as line of credit services.
With the CITIONE account, customer's accounts could be linked together randomly so that the financial institution's different products and services could be linked together and appear on a customer's statement. This was done on an ad hoc basis depending on a customer's desires. The basic features available in the United States were checking, day-to-day savings, and insured money market accounts, certificates of deposit (CDs) and credit cards.
The next step in the evolution was the Citibank Money Management Account (CMMA), introduced around January 1993. The CMMA allows customers to link separate accounts and to perform a wide variety of financial transactions including traditional banking activities, brokerage activities and loan activities. Again, individual customer accounts could be linked to form an ad hoc mixture of product features. The system categorized those features within categories such as "your money in the bank," "securities," "borrowing and loan," "credit cards" and the like. Among other things, the CMMA allows banking customers the convenience of "one-stop" shopping. Efforts were also made to provide consistent presentation. For example, on the screen phone and in personal computing banking, the top menu was made to look like the same menu on an ATM machine. However, after the initial screen, the systems diverged.
Notwithstanding the opportunities offered by the CITIONE and CMMA accounts, there is still significant room for improvement. Specifically, the present inventors recognize that while some of the infrastructure is in place, the understanding and concept of a single account that includes all of these features has not yet been achieved. The accounts were still linked on an ad hoc basis and customers were required to open up individual accounts. This required effort in educating customers about these accounts and in selling these accounts.
As with technological advances in remote delivery products, these new accounts offer the possibility of realizing improved customer services and significant operating efficiencies and reduced cost. Again, however, the potential benefits to be obtained from using an integrated financial system such as the CMMA have not yet been fully realized.
As noted above, the present invention is also directed to a data model that reflects the structure of a customer's relationship to the bank. To anticipate a customer's needs and support targeted marketing, a service provider must know its customer. Knowing one's customers is also important for improved customer service, another proven way of getting and keeping new customers. Since truly understanding a customer's relationship with a bank becomes more difficult when the number of customers increases and the frequency of each customer's contact with a particular employee decreases, the size of a large financial institution's customer base can present an obstacle to some marketing efforts. In the financial community today, a large financial institution may have several million households and customers each with a unique set of accounts. The data available for these households, customers, and accounts is so massive, that it has heretofore not been fully used for marketing campaigns.
In an effort to deal with a large customer database, businesses traditionally maintain customer records. In some cases these records are in the form of simple paper records, but recently electronic records have become common originally, separate data storage was used for each electronic record keeping application. Thus, each department in a financial institution, for example, would have a program that created and maintained records needed for its purpose. The problem with this approach is that information must be extensively duplicated. For example, a customer's name and address might appear in separate files in several separate departments.
There are other problems with application specific data storage. Since a customer's information is entered in more than one file, any change in status must be entered into each file, often by different people. Over time the accuracy and uniformity of the data deteriorates. In addition, the use of application specific data storage requires more data entry and more storage space.
The concept of a database, introduced more than twenty years ago, has come a long way toward eliminating these problems. In a database, data is stored in a central location so that there is no duplication of data. Database management programs are used to manage databases. Examples of currently available database management programs include DB2.TM. (for larger databases) and dBase.TM. (for personal computers).
Typically, a database management system (DBMS) is used to manage the creation,.storage, access, updating, deletion, and use of a database. A typical DBMS creates databases and their structures; provides the means for the control and administration of the data in the database; provides the means for users and application programs to access, enter, modify, and manipulate the data in a database; provides a report generator; provides "ad hoc" query facilities; provides reports to management on who accessed the database and what activity was performed; provides reports to operators on hardware utilization, status of current users, and other monitoring data; and provides automatic backup and recovery routines for the data in databases.
Multiple-user databases present several additional challenges. These include maintaining system performance as the number of users increases, controlling concurrent access of data, maintaining security, and administrating the database.
Attempts to build and use customer databases have a variety of limitations. In a general sense, these limitations fall into two distinct categories: limitations in the sources and quality of data input into the database and limitations on one's ability to search and retrieve data from the database. In some cases these limitations work in opposition to one another. For example, as one improves the size and quality of a databases, searching and retrieving data from the database becomes more difficult.
Full service financial institutions typically offer consumers a wide variety of financial products, including traditional deposit, investment, loan, and mortgage accounts, as well as a variety of financial services, including credit cards, brokerage, direct access, business access, checks as cash, telephone bill payment, and safety check. In addition, financial institutions now typically offer access to financial services through a variety of means, including automatic teller machines (ATMs), customer activated terminals (CATs), screen phones, personal computers configured for banking, personal digital assistants, voice response systems, and smart cards, as well as traditional human bank tellers. Information from these diverse sources provides an opportunity to obtain an unusually complete picture of a customer's relationship with the financial institution. Thus, the ability to store and retrieve this wealth of data in a meaningful way has enormous commercial potential. Despite this commercial potential, there remains a need for a system and method for assembling a comprehensive database from these diverse sources and retrieving information from the central database in a meaningful and practical way.
There are several deficiencies in currently available systems and methods for assembling customer financial data and retrieving information for use in marketing and customer service systems. To begin with, conventional systems do not allow access to a customers' entire relationship with the financial institution or complete demographic information about the customer (i.e., the customer's "profile"). Basic information about existing customers is frequently not available or even recognized as being related to the customer.
Thus, there remains a need for an improved integrated global communications network and data model that integrates customer information and makes the information accessible from remote locations.